As Hong Kong actively embraces Web3 and the application for stablecoin licenses enters a "countdown" mode, unexpected news has emerged from the market. On September 29, 2025, sources exclusively revealed to Foresight News that at least four financial institutions with Chinese backgrounds, including Guotai Junan International, have recently withdrawn from the application for stablecoin licenses in Hong Kong or postponed their related attempts in the RWA (Real World Assets) sector due to prudent considerations. This "retreat" phenomenon sharply contrasts with the previous fervor in Hong Kong's crypto market, indicating that the gold rush for Web3 in Hong Kong may face a partial cooling, and once again highlights the cautious attitude of mainland regulatory agencies towards the participation of Chinese institutions in overseas digital asset businesses.
I. "Retreat" of Chinese Institutions: Partial Cooling in Stablecoin and RWA Sectors
The Hong Kong Monetary Authority (HKMA) has set two important deadlines for stablecoin license applications: express the intention to apply by August 31 and submit the formal application by September 30. However, just before the deadline, some Chinese institutions chose to "withdraw" or "postpone."
Withdrawal from stablecoin license applications: Morgan, an executive close to Hong Kong financial institutions, revealed that some Chinese banks have adopted a more cautious strategy based on guidance from regulatory agencies, with several institutions choosing to postpone their entry. This means that among the 77 institutions that previously expressed their intention to apply, some with Chinese backgrounds will miss out on the first batch of stablecoin licenses.
Postponement of RWA business: In the RWA (Real World Assets) sector, some Chinese institutions have also postponed related business attempts due to guidance from regulatory agencies. Lee, a practitioner close to Chinese brokerages, disclosed that several institutions, including Guotai Junan International, have suspended their RWA-related activities in Hong Kong, and Guotai Junan's RWA business has been halted. Lee also mentioned that another Chinese brokerage listed on the A-share market has received notice to stop its ongoing attempts in Hong Kong's RWA sector.
II. "Cooling" Signals from Mainland Regulatory Agencies: Prudence and Risk Isolation
Industry insiders pointed out that the HKMA has set two important deadlines for market participants: institutions must express their intention to apply by August 31 and submit formal applications by September 30. This means that institutions that have not submitted applications by tomorrow will miss the first batch of stablecoin licenses.
Partial cooling: Before and after the formal implementation of Hong Kong's stablecoin regulations, signs of cooling have already begun to appear in the market. In early August, several financial institutions and internet companies announced their applications for stablecoin licenses and actively entered the RWA sector. However, almost overnight, all financial institutions, internet companies, and entities entering Hong Kong's stablecoin sandbox canceled external interviews and all public discussions regarding stablecoins.
Regulatory guidance: Foresight News learned from sources that mainland regulatory departments have conveyed relevant guidance to financial institutions, requiring them to maintain a low profile in their business and statements involving stablecoins, avoiding excessive publicity or creating public opinion hotspots, and ensuring strict internal research and public sentiment management.
Risk isolation: According to a report by Caixin on September 11, an informed source revealed that Hong Kong's stablecoin business is still in its infancy, and its future direction is unclear. Excessive participation by Chinese institutions may bring risks, thus necessitating prior risk isolation. Another senior financial industry insider indicated that previously more proactive Chinese banks and state-owned enterprises in Hong Kong, such as Bank of China Hong Kong, Bank of Communications Hong Kong, China Construction Bank (Asia), and Cinda International, may delay their applications for stablecoin licenses in Hong Kong.
The "Three No's" principle: Morgan interpreted the regulatory attitude as follows: first, prohibit Chinese institutions from conducting business related to Hong Kong's crypto sector domestically and participate cautiously in virtual asset-related businesses; second, prohibit the influx of mainland funds; third, the parent companies behind Chinese financial institutions must bear compliance responsibilities.
III. Hong Kong's Rhythm Compared to Global Trends: Cautious Exploration and Market Differences
At the beginning of 2023, the entire U.S. crypto market was in a warming trend, with hotspots in exchanges, ETFs, stablecoins, RWA, and DAT never ceasing. However, Hong Kong has its own rhythm.
Hong Kong's RWA pilot: Morgan stated that Hong Kong's RWA pilot in the primary market has been underway for over two years, with currently about thirty to forty projects in operation, most with project scales of around ten to twenty million Hong Kong dollars. "Theoretically, the secondary market for RWA in Hong Kong is feasible, and there may even be institutions that have already applied."
Rhythm of stablecoin license issuance: Hong Kong's stablecoin sandbox (Stablecoin Issuer Sandbox) officially launched on March 12, 2024, and has been operating for about a year and a half. After the stablecoin license regulations took effect in Hong Kong, the HKMA received 77 expressions of intent for stablecoin license applications in August. Informed sources predict that the first batch of stablecoin licenses will be issued by the end of this year or early next year. The pace of stablecoin license issuance in Hong Kong may resemble that of previous Hong Kong cryptocurrency exchanges.
Impact of international circumstances: Changes in international circumstances are also rapidly transmitting to Hong Kong's crypto industry. The progress of stablecoins and RWA in regions such as the U.S., Europe, and South Korea is also influencing Hong Kong's progress. On September 25, nine major banks in Europe jointly launched a euro stablecoin subject to the EU's Markets in Crypto-Assets Regulation (MiCA).
DAT sector: DAT (Digital Asset Treasury Company) is also a sector that has yet to gain traction in Hong Kong. For example, Yunfeng Financial, known as "Jack Ma's cryptocurrency concept stock," accumulated 10,000 ETH in the public market on September 2 and stated that in addition to Ethereum, it plans to explore including BTC, SOL, and other diversified mainstream digital assets into its strategic reserve assets.
IV. Exitors and Entrants: Deep Integration of Cryptocurrency and Finance
The cryptocurrency industry is fully integrating into the entire financial system of Hong Kong.
VASP licenses: Attracted a number of brokerage institutions to join, such as Futu Securities, Tiger Brokers, and Victory Securities.
Spot ETFs for Bitcoin and Ethereum: Attracted a number of wealth management institutions, such as Huaxia Fund and Bosera Fund.
Stablecoins: Attracted several banks to join, such as Bank of China International and Standard Chartered Bank.
DAT: Attracted several Hong Kong-listed companies to join and be included in their balance sheets, such as Yunfeng Financial.
Temporary exits do not mean permanent losses. Just as the internet changed the financial industry, today almost all brokerages are internet brokerages, and all banks are internet banks. The integration of cryptocurrency and finance may become deeply boundless in the future. The first batch of entrants will bear the greatest risks and reap the largest rewards.
V. Hong Kong's Regulatory Positioning: Balancing Innovation, Integration into the Real Economy, and Risk Control
On September 30, news from Caixin reported that in an exclusive interview, Hong Kong's Financial Services and the Treasury Bureau's Xu Zhengyu stated that the application for compliant stablecoin licenses is progressing according to the original framework, with the first batch of licenses expected to be issued as scheduled in early 2026. Hong Kong's regulatory positioning is very clear: it aims to achieve a balance in three aspects: innovation, integration into the real economy, and risk control. The first step will be to implement the Hong Kong dollar stablecoin.
Regarding the issuance of RMB stablecoins in Hong Kong, Xu Zhengyu stated that from Hong Kong's perspective, the legal framework allows different fiat currencies to serve as the underlying benchmarks for stablecoins. However, currency carries sovereign intent and strategic considerations; linking to the RMB must take into account national exchange rates and monetary policies, requiring a comprehensive assessment of the associated risks and benefits. Additionally, the Hong Kong Inland Revenue Department has clarified that transactions involving tokenized ETF shares or units conducted on licensed digital asset trading platforms or other platforms in Hong Kong are exempt from stamp duty.
Conclusion:
The exit of the first batch of participants from the Hong Kong stablecoin and RWA market reflects the cautious attitude of mainland regulatory agencies towards the participation of Chinese institutions in overseas digital asset businesses. This does not signify a setback for the development of Web3 in Hong Kong, but rather an inevitable process of seeking balance between financial innovation and risk control. The cooling of Hong Kong's crypto market can happen overnight, and similarly, the partial warming or sudden warming of Hong Kong's crypto market may also occur in an instant. With the imminent issuance of the first batch of stablecoin licenses and Hong Kong's continued exploration in the digital asset field, we have reason to believe that Hong Kong will continue to play an important role in the global Web3 wave, but its development rhythm and model will place greater emphasis on compliance and risk isolation.
Related Reading: The final countdown for Hong Kong's stablecoin licenses, with Bank of China, JD.com, and Ant Group engaging in a "silent battle."
Original article: “Exclusive news from the crypto media: Guotai Junan and three other Chinese institutions withdraw from the application for Hong Kong stablecoin licenses”
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